Owning a small business means you constantly need to make decisions that affect its financial health. While you probably never thought choosing a savings account was so important, it’s a huge factor that helps grow your money and expand your business.
But with all the different banking options, how do you know which is right for you? Well, that depends on your business – how many transactions you use in the normal course of business and what your financial goals are.
I tried to help you out and compiled this list of the best business savings accounts in Canada. I took into consideration interest rates, monthly fees, and access to physical branches and ATMs.
Narrow down the most important factors you’re looking for in a savings account and see which one fits your business.
Considering a savings account when you’re setting up a business probably isn’t at the top of your priority list – but maybe it should be. A separate business account – both chequing and savings, makes your business look more credible to customers.
Not only that, but separate accounts make it easier to keep track of business income and expenses, especially come tax time.
Adding a savings account, especially one with a higher rate of interest, allows your money to grow while you expand your business. In addition, savings accounts are insured by the Canada Deposit Insurance Corporation (CDIC).
A business savings account allows certain employees authorization to make transactions. This division of labour can be a lifesaver if you’re not around to approve a transaction, as well as keeping a check on the cash side of things.
When you’re ready to make the jump and open a savings account, here’s what to look for:
- Monthly fees
- Minimum balance requirements
- Transaction limitations
- Interest rate
As some banks have transaction limits and minimum balance requirements, it’s best to consider your business practices and how many transactions you tend to average per month.
Also, keep in mind your potential savings balance. With many banks requiring a minimum balance, it’s important to know that number ahead of time.
Additionally, you’ll want to consider a bank that might offer additional perks, like automatic bill pay or discounts on payroll services.
Also, once you have an established account and relationship with a bank, you’re more apt to seek out additional services from them. This might mean opening a line of credit or obtaining loans through them in the future.
When narrowing down the best business savings account, I took into consideration several factors. Those include interest rates, monthly fees, perks, and transaction fees to determine the best accounts for your small business.
I reviewed interest rates and gave them a rating of excellent, good, average, below average, and poor. Here’s who made the list.
1. Tangerine Business Savings Account
Interest Rate Ranking: Good – The Business Savings Account offers a tiered interest rate dependent upon your balance.
How to sign up: Submit an enrollment request online, and Tangerine will contact you regarding the next steps.
It’s easy to see why Tangerine is Canada’s most popular online bank. With no minimum balances, no monthly fees, and competitive interest rates, opening a savings account here is a great choice for many businesses.
Tangerine does require you to have a chequing account at another financial institution in order to open one of their savings accounts, adding a potential drawback for some.
With Tangerine, you have access to over 3,500 ATMs on the Scotiabank network and have an array of digital banking tools, including a mobile app, at your disposal.
2. Motusbank High-Interest Savings Account
Another online bank, Motusbank features a High-Interest Savings Account. Although they don’t have separate business accounts, sole proprietors can still open one.
This account features no monthly fees or minimum balances. There are unlimited debit purchases, and withdrawals and cardholders have access to over 43,000 surcharge-free ATMs located throughout North America.
Motusbank also features its free perk – Price Drop. All you have to do is submit a receipt through the app, and Price Drop will search for a better deal. If one is found, you’ll get the difference refunded back to you.
3. ICICI Bank Business Savings Account
Interest Rate Ranking: Good. The interest rate is higher than most other banks and isn’t tiered like many others. This means you earn a decent interest rate even if you have a lower balance.
How to sign up: Opening a savings account requires potential customers to visit a branch. However, ICICI provides a list of documents you need to have ready for your visit.
This Business Savings Account requires no monthly fees or minimum balances. Bill payments are free, as well as transfers between bank accounts. The only fee comes from in-branch withdrawals and costs $5 per transaction.
ICICI provides digital banking as well as a user-friendly mobile app. It’s easy to check balances, make transfers or manage all your accounts.
The bank also participates in Canada’s THE EXCHANGE network, allowing its customers access to thousands of ATMs across the country.
4. Scotiabank Right Size Savings Account
Interest Rate Ranking: Good. Scotiabank offers a tiered interest table that progressively increases as your balance grows.
How to sign up: You can start an application online. However, you may need to go to one of the nearest branches in order to fully open an account.
With this account, there is no monthly maintenance fee. In addition, the higher your balance, the more interest you can incur. In order to earn interest, you need to have a minimum balance of $10,000.
The mobile app is easy to use and has lots of features to make your life simpler. You can check your balance anywhere, pay bills, and make transfers.
With branches throughout Canada, it’s easy to set up an account or talk with a service rep if you have any questions.
5. Simplii Financial High-Interest Savings Account
Interest Rate Ranking: Excellent during the initial promotional period and about average after that.
How to sign up: Apply online for a savings account as long as you are a resident of Canada and are of the age of majority in your province.
Simplii Financial is an online bank that offers a high-interest savings account featuring no minimum balances and no monthly or transaction fees.
They often run promotions to encourage new clients to sign up. The current promotion allows new customers to earn a high-level interest rate for a few months before returning to its regular one. New customers can take advantage of this, along with no monthly fees, to grow their savings for future dealings.
Simplii offers other promotions for referrals as well. If you share your referral link with someone and they open an account, you’ll both receive $50.
This type of savings account is best for sole proprietors since Simplii doesn’t allow customers to open savings accounts under a business name. However, with no fees and promotional interest periods, it’s a good choice for single business owners.
6. TD Business Savings Plan
Interest Rate Ranking: Average. TD includes a tiered interest rate system based on the daily closing balance.
How to sign up: Opening a business savings account requires an in-person meeting. You can schedule the appointment online.
The TD Business Savings account complements any business chequing account. It offers free transfers to and from any TD Trust accounts, but there are fees for other services.
- Deposits/credits at $1 each.
- Withdrawals/debits $5 each
- Deposits of cheques, money orders, etc. $.22 each.
While most brick-and-mortar banks offer lower interest rates than their online counterparts, TD’s tiered interest rate system is comparable to most online banks.
TD offers many other business solutions, including business credit cards and a straightforward mobile banking app. And with over 1,100 branches throughout Canada, it’s easy to pop in anytime you have a question or are looking for a service to fit your needs.
7. RBC Basic Business Savings Account
Interest Rate Ranking: Good. Interest is paid on a tiered level and increases with higher balances.
How to sign up: Opening a savings account requires you to either visit a local branch or call the Business Helpline.
RBC offers this savings account for small businesses looking to earn interest on their extra capital. With no monthly fee and no minimum balance required, the Basic Business Savings Account lets your money grow.
There are two free debits or cheques offered each month, but after that, there’s a charge of $3.5 each. 999 credits/deposits are allowed each month, but after that, it’s $1 each.
There are over 800 branches and 4,200 ATMs, making it a convenient choice.
8. CIBC Business Investment Growth Account
Interest Rate Ranking: Average. Interest-based on the daily closing balance – rates similar to other banks, maybe slightly lower.
How to sign up: Complete the application online but then you need to stop into a local branch to bring in the documentation and complete the process.
With no monthly fee or balance minimums, CIBC wants its customers to grow their money and meet their business goals.
There are fees for credit and debit transactions. They are as follows:
- $1 per self-service credit transaction
- $1.25 per full-service credit transaction
- $5 for each debit transaction
There is no charge for bill payments or transfers between your accounts.
Finding a savings account to fit your business isn’t easy. Between fluctuating interest rates and different account fees, it’s hard to choose the right one.
And while there are pros and cons to both online and brick and mortar banks, once you decide what’s most important for you and your business, you’ll find there’s a savings account to fit your needs.